Epstein on Obama's Budget Speech

Let the Rich Get Richer

Richard A. Epstein

Defining Ideas

April 19, 2011

President Barack Obama’s budget speech was delivered at George Washington University Law School on April 13, 2011. What is most notable about the speech was not the predictable and partisan reaction to it. Rather, it was the president’s deft use of rhetorical tropes to pull off his increasingly transparent maneuver of talking right while moving left.

As is par for the course, the speech contains enough platitudes to make it appear that the president is a fair-minded man—a man who understands the difficult trade-offs that must be made in order to balance the imperatives of market growth with the just provision of government resources to all individuals. In the end, however, this presidential straddle will fall to ruins because of its implicit assumption that transfer payments will do no harm to total production, even as they redress the inequality of fortunes in this country. Not so. But rather than jump ahead in the story, it is best to track Obama’s argument as if it were an exercise not of partisan politics, but of political theory.

The opening gambit in Obama’s speech contains his usual homily to free markets: "From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity." What’s more, according to Obama, is that America is truly, among the nations of the world, a country of "rugged individualists." The usual "but," however, was not long in coming. And it came when Obama quoted Abraham Lincoln: "through government, we should do together what we cannot do as well for ourselves."

Without a doubt, this point has some real power. The provision of classical sorts of public goods—police protection, sanitation, public highways and infrastructure —often requires government support. There is, for example, no way that the government can provide protection against foreign aggression for some individuals unless it provides that protection for all. The nonexclusive nature of classical public goods means that the nation can no longer rely on the voluntary coordination of individuals, or even of states, to deliver these services. What’s more, the government must impose national taxes to overcome this failure.